Price trend

Favorable news provided a significant boost to market prices, significantly boosting industry confidence. Coupled with relatively solid cost support and the expected release of overall demand during the traditional peak season for steel production, ferrosilicon prices were relatively favorable last week, with limited room for discounts and low-priced supplies difficult to find. According to the SunSirs Commodity Market Analysis System, on September 19th, ferrosilicon (grade: FeSi75-B; particle size/mm: natural lump) was quoted in the Ningxia region between 5,300 and 5,450 RMB/ton, with an average price of 5,338 RMB/ton, up 1.77% from Monday.

Influencing factors

Raw material semi-coke market:

Last week, the national semi-coke market was relatively stronger. With the cost side of coal prices continuing to rise and the market supply still tight, semi-coke companies' price-supporting sentiment increased, the market supply and demand game intensified, and the prices of small and medium-sized materials ushered in a new round of increases. As of September 19, the price of medium-sized materials in Shenmu market was 700-750 RMB/ton, the price of small materials was 670-700 RMB/ton, and the mainstream price of coke flour was 460-520 RMB/ton; the price of medium-sized materials in Fugu market was 640-700 RMB/ton, the price of small materials was 630-760 RMB/ton, and the mainstream price of coke flour was 460-580 RMB/ton; the mainstream price of coke flour in Zhongwei market was 530 RMB/ton; the price of mixed materials in Shizuishan market was 520 RMB/ton; the price of small and medium-sized materials in Ordos market was 645-670 RMB/ton, and the price of coke flour was 560 RMB/ton; the price of small and medium-sized materials in Hohhot market was 650-660 RMB/ton, and the price of coke flour was 580 RMB/ton; The price of small and medium-sized materials in Hami market was 580-700 RMB/ton, coke flour was 240 RMB/ton, and mixed materials were 195-280 RMB/ton; the price of small and medium-sized materials in Changji market was 600-700 RMB/ton, coke flour was 300 RMB/ton, and the above were all ex-factory prices in cash including tax; the price of small and medium-sized materials in Tianjin Port iwas 960-990 RMB/ton, and coke flour was 720-880 RMB/ton, and the above were all port closing prices in cash including tax; the price of small materials in Yumen market was 255-460 RMB/ton, coke flour price was 320-550 RMB/ton, carbon powder price was 440-450 RMB/ton, and rice material price was 350-380 RMB/ton, all are ex-factory prices in cash including tax.

Production Status

Supply operations remained high, with no significant increase in output, insufficient profit recovery, and increased inquiries. Shipments from production areas had significantly improved, further boosting market sentiment. As of September 18, the national operating rate (capacity utilization) was 34.84%, unchanged from the previous week. Average daily output was 16,150 tons, also unchanged from the previous week.

Downstream Situation

September was a period of concentrated purchasing for downstream steel mills, with purchasing prices fluctuating around Hegang's 5,800 RMB/ton price the previous week. The upward trend in finished product demand was uncertain, and the peak demand season of September and October remained to be seen. Steel prices are unlikely to rebound significantly, and thus, steel mill profits are unlikely to see a significant breakthrough. Consequently, steel mills will continue to adopt a low inventory strategy for raw material procurement, sourcing on demand. Traders were clearly experiencing market fluctuations, and under pressure from losses, there is a high probability of further price increases and price reductions, limiting the scope for further purchases. On September 19, the market discount was repaired, and bearish sentiment had weakened.

Market outlook

As of September 19th, ferrosilicon production capacity utilization remained high. With stronger market sentiment and the upcoming National Day holiday, downstream buyers were actively purchasing. The market remained cautious as to whether the market volatility at downstream steel mills, coupled with a shift in sentiment, will further alter the supply and demand landscape. Ferrosilicon manufacturers' quotes remained strong, with active trading driving price increases on the production side. In the short term, the domestic ferrosilicon spot market is likely to remain relatively stable.

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